Entries from April 2009
Thank you to everyone involved in last Wednesday’s (April 22nd) inaugural Cleantech Angel Network Investment Breakfast. The group could not have anticipated a better turnout for the event!
Three companies presented to over 60 attendees, including more than 35 Angel investors at the Fogler Rubinoff LLP main boardroom. There was a palpable buzz in the room and a general enthusiasm surrounding the launch of the Cleantech Angel Network. Furthermore, there was follow-on interest to conduct due-diligence on all three of the presenting companies.
Overall, the meeting was a great catalyst in their mission to connect Angel investors with Ontario’s best and brightest Cleantech companies.
A special thanks goes to all of the supporters for the event, including Fogler Rubinoff LLP, Gowling Lafleur Henderson LLP, CNSX, PriceWaterhouse Coopers, IRonside Investor Relations Inc., National Angel Capital Organization, OCETA, and the Province of Ontario – Ministry of Research and Innovation.
Cleantech Angel Network will announce their next meeting date shortly along with some new policies that will continue to build on the progress made at last Wednesday’s meeting.
For more information on the Cleantech Angel Network, please contact James Black at 416.840.6970 or email info@cleanangelnetwork.com.
Next investment breakfast is on May 27th, save the date on your calendar!
Categories: NACO Events
Space at the Spring 2009 Canadian Co-investment Summit on May 22nd is going fast! This complimentary half-day event, to be hosted by the Ted Rogers School of Management at Ryerson University and the National Angel Capital Organization, promises to be even more exciting and compelling than the last.
Well over half the seats available have already been reserved, and many strong companies have already applied to present. With the solid support of the Ted Rogers School of Management and the Ministry of Economic Development, we intend to improve on the results of the First Summit in November 2008, which itself saw 150 Angels viewing 25 companies’ presentations.
Register today to save your seat, or submit for consideration any company looking for second-round financing which has an Angel champion to introduce them!
Categories: NACO Events
Tagged: angel investor, co-investment, Co-investment Summit, entrepreneur, naco, National Angel Capital Organization, ryerson university, toronto
Basil Peters, noted British Columbian investor and entrepreneur, has recently authored a book titled Early Exits: Exit Strategies for Entrepreneurs and Angel Investors (But Maybe Not Venture Capitalists). The author’s intent for this book is to fill the gap that exists between currently available books for retiring entrepreneurs looking to sell out, and venture capitalists who may control all the terms and conditions of an exit from the start.
According to Mr. Peters, exits are often completed when companies are only two or three years from startup, and the largest number of exit transactions today are in the under $30-million valuation range. As the fund manager for Fundamental Technologies II, an angel investment fund in British Columbia, Mr. Peters can draw upon a wealth of personal experience to deliver a rewarding read.
Click here to find out how to order it, and click here to read chapter one (pdf).
Categories: 5547802
Small Project Accelerated Review Process, a new initiative of the National Research Council’s Industrial Research Assistance Program, provides up to $50,000 on a rapid turnaround basis to growth-oriented innovation projects by for-profit Canadian corporations with fewer than 500 employees.
Small Project ARP covers up to 100% of internal labour and 75% of sub-contractor fees, and provides a scope of eligible activities to include a wide range of technology, business and market-oriented support.
For a list of eligible projects, here is a link to the Health Technology Exchange’s post on the same subject. For additional information, contact your local Industrial Technology Advisor, or call NRC-IRAP at 1-877-994-4727 (toll free).
Categories: Angel Links · Government programs and policy
Tagged: Government of Canada, industry canada, innovation funding, NRC-IRAP, small project accelerated review process
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WASHINGTON, DC–(Marketwire – April 18, 2009) – Venture capitalists invested just $3.0 billion in 549 deals in the first quarter of 2009, according to the MoneyTree™ Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters. Quarterly investment activity was down 47 percent in dollars and 37 percent in deals from the fourth quarter of 2008 when $5.7 billion was invested in 866 deals. The quarter, which saw double digit declines in every major industry sector, marks the lowest venture investment level since 1997.
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Celebrating risk taking: the contribution of business angels and early stage investors
EBAN- is the European trade association for early stage investors, and independent and non-profit association representing the interests of business angels networks (BANs), early stage venture capital funds and other entities involved in bridging the equity gap in Europe. It currently federates 90 organizations in 25 countries.
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Mark your calendars for April 28th when Tech Legend Ken Spencer will host a fireside chat at the Vancouver Enterprise Forum. More details and Ken’s bio follow:
As part of the Technology Legends theme, the VEF is pleased to present a fireside chat with local legend Ken Spencer. After holding a senior executive role in many BC technology companies such as MacDonald Detwiller and Associates and Glenayre, Ken and his partner Dan Gelbart branched out on their own to found Creo Products. Over the next 20 years, they grew the company into BCs largest technology company with 4,000 employees and revenues of nearly $1 billion, took the company public and eventually sold the company to Kodak in 2005.
Laurie Wallace, past co-founder of Datum Telegraphic and FlyOver Entertainment and current chair of Constrcutive Media and Vivity Labs will moderate the fireside chat. He and Ken will talk about Kens drive to co-found Creo Products, his motivation for wanting to run his own company, and the keys to growing Creo into BCs largest technology company.
For more information and registration, please visit the Vancouver Enterprise Forum website. the event begins at 5pm.
Categories: 5547802
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Joey deVilla, Austin Hill, and I (here & here) have written about one of the best indicators of a strong startup community is the number of repeat entrepreneurs and the number of successful follow on/spinout companies. It’s the “Fairchildren” principle that is one of the many complex factors attributed to the rise of Silicon Valley.
Workbrain agreed to be acquired back in April 2007 for $227M. This was one of the largest software acquisitions in recent history in Toronto, Platespin’s $205M acquisition by Novell being the other. It has been 2 years since the the announcement, and it appears that many of the Workbrain’s ex-founders and senior executives are starting to turn up running the next generation of Toronto startups poised for massive success.
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In conjunction with the Angel Capital Association (USA) annual summit in Atlanta, Georgia, and with the support of Foreign Affairs and International Trade Canada, the NACO hosted a very successful Co-investment Dinner at Maggiano’s of Italy in Atlanta, Thursday April 16th. Over 40 persons attended, including three NACO directors, individual Angels from the Southeastern USA, and representatives of Angel groups or funds from Toronto ON, Vancouver BC, Boston MA, New York City NY, Milwaukee WA, Virginia, Washington, and even as far afield as France, Mexico and Chile.
All in all it was a fantastic opportunity to build bridges with Angels near and far and to renew acquaintances, and we are grateful for the assistance and support of the Canadian Consulate in Atlanta as well as the Angel Capital Association, who helped so much in making this event all it could be! If you happen to find yourself in the southeastern United States on investment business, the consulate and the ACA can be of great assistance indeed.
Categories: 5547802 · NACO Events · NACO News
Tagged: Angel Capital Association, Canadian Consulate in Atlanta, Co-investment Dinner, Foreign Affairs and International Trade Canada, National Angel Capital Association
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How are Canada’s cross-border laws thwarting entry of this much needed foreign capital? The Canada – US tax treaty provides that investors of each country, when investing in the other, will be taxed on investment gain only once. For example, a Canadian venture capitalist investing in a private US company will be taxed only in Canada on its gain upon sale, and not in the US. The US strongly encourages Canadian investment in the US by automatically recognizing a Canadian investor’s treaty exemption from double taxation – no paperwork – no delay – no withholding – and the Canadian VC is immediately free to take its sale proceeds back to Canada.
In sharp contrast, US venture capital firms investing in Canada face nightmarish red-tape and delays to achieve the same reciprocal treaty benefit in Canada. When selling shares in a private Canadian corporation, they must apply for a “Section 116” clearance certificate to one of 45 Canadian government offices that grant it.
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This summer, the Ministry of Small Business and Consumer Services is giving motivated students the opportunity to create a job they’re passionate about.
Students can come up with a business idea of their own and score up to $3000 to bring their vision to life. Summer Conpany will hook them up with a mentor to guide them and teach them what it takes to get on top in the business world.
We urge all our friends and colleagues out there to let promising, independent-minded students know about this program and help to bring new businesses to life – space is limited!
Categories: Angel Links · General NACO
Tagged: enterprises, Ministry of Small Business and Consumer Services, Ontario, start-ups, students, summer, Summer Company
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The High Growth and Failure data show that very young firms (one year old) have a net employment growth rate of about 15 percent, if they survive, but about 20 percent of jobs at startups are lost due to business establishment closings in the first year. Older firms (age 29 and older), on the other hand, create jobs at a rate of about 4 percent, conditional on survival, and have a similar rate of job loss due to business establishment closings. Among surviving firms, average employment growth rates decline with the age of the firm.
"Because entrepreneurial companies generally are taking greater risks and have the potential for job creation that corresponds to fast growth, the data underscore the need to ensure an environment which allows entrepreneurs access to financing, mentoring and other resources that will help them to survive and thrive," said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation.
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The Tech Coast Angels (TCA), the largest angel investor group network in the United States, today announced that TCA members have provided growth capital to Bikestation®, the nation's only turnkey solution for bicycle and other alternative transportation infrastructure for municipalities, campuses and developers. According to Raulee Marcus, lead investor from TCA for the Bikestation funding, "It is the mission of Bikestation to allow people to move efficiently from place to place in new ways. Bikestation has developed a unique solution that allows people to ride and park their bikes or use small electric vehicles in a safe, secure, indoor, remotely monitored environment complete with comfortable lockers, changing facilities, showers, repair services, and all the accessories they need for their bicycles… It is a true paradigm shift — and for TCA, a triple bottom line investment benefiting people, producing profit and saving the planet."
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In the latest issue of Small Business Financing Profiles, published by the Government of Canada’s SME Financing Data Initiative, there are some interesting insights about innovative versus non-innovative Small and Medium-size Enterprises (SMEs). Innovative SMEs are defined as those who spend more than 20% of invested capital on research and development (R&D).
It turns out that Ontario has the highest share of these innovative SMEs. They are four times more likely to seek equity financing (including from Angel investors) than non-innovative SMEs. A greater percentage (32.2%) approach Angel investors for equity financing than any other source of such financing (with friends and family a close second).
A key quote: “Typically, innovative SMEs have few physical assets, often base their strategic plans on new technologies and have higher than average business risks. Because of these high risks, it is difficult for innovative SMEs to access debt financing.”
This report once again underlines the importance of Angel investors to Canada’s innovators and SMEs!
Categories: 5547802
Over 80 Investors have responded to the Angel Forum March 2009 Survey: Outlook for Private Investing in 2009, with the following results:
* 78% said they would invest in the right new company in the next 3 months and 30% would invest more than $150k
* 45% said Q2 of 2009 is the best time to invest in a new company and 19% said they would only invest after Q1 of 2010
* 55% prefer companies with some sales < $1 million and 38% would consider pre-revenue companies
* Valuation of pre-revenue companies must be less than $1 million and < 3x trailing revenue for revenue companies
Don’t miss the next Angel Forum in Vancouver May 26th!
Categories: 5547802
Friend to CEO Fusion and the CEO of Flow Ventures, Raymond Luk, recently invested in Symtext, a Toronto based startup. Led by digital media industry veteran and CEO Fusion member Ian Barker.
Symtex developed a platform for building ‘liquid textbooks’ which combine content from e-books and other digital content into unique learning tools. Containing both licensed works and royalty-free works, Symtext allows professors to create unique liquid textbooks for their courses and provides students with an interactive learning experience that goes beyond traditional textbooks. For more details, have a look at Flow Ventures’ blog.
The announcement was also picked up by TechVibes.
Flow Ventures is a tech startup accelerator that provides seed capital and hands-on operational support to early-stage ventures.
Categories: NACO News
Tagged: angel investment, flow ventures, symtext angel investor
Meet 30+ companies and network with other investors at the 25th Angel Forum on May 26.
Detailed Selection Criteria: During screening Angel Forum will focus on companies with revenues and realistic valuations although some pre-revenue companies with unique IP will be selected.
Co-Investment: To improve investor diversification and co-investment, deal management and investor collaboration software is used. There will be an investors-only discussion after each presentation, focusing investors on each company and recruiting a company-specific due-diligence team. After the Forum, interested investors are linked up with each entrepreneur.
Don’t Delay: First 15 registrations cost only $50. Come as the guest of the Angel Forum (no fee) if you arrange for a company with revenue to apply to present. Bring an accredited Investor Friend or Spouse (no fee) if you register them on your registration.
Questions? Email Bob Chaworth-Musters at Bob@angelforum.org.
Categories: Angel Links · By The Numbers · NACO News
We encourage all our colleagues and associates to join the critical masses and attend Discovery ‘09, the annual conference of the Ontario Centres of Excellence!
When: May 11th and 12th, 2009
Where: Metro Toronto Convention Centre (South Building)
Visit the OCE Discovery ‘09 website to register before April 9th, and save on attendee and exhibitor fees!
Themed ‘Future Ready: Innovation for a Global Marketplace‘, and billed as Canada’s premier commercialization event, Discovery ‘09 will host bold visionaries, venture capitalists and over 1,500 delegates. OCE’s annual Discovery conference has evolved to become the single largest forum that explores the critical touch points in the innovation and commercialization process, which will leverage increased economic prosperity here and throughout Canada.
For highlights of the 2008 conference, visit here.
Categories: NACO Events
Tagged: canada, commercialization, Discovery 09, Metro Toronto Convention Centre, Ontario Centres of Excellence
